The Bar Blogger

I hosted an event online yesterday for 50 Irish and UK hospitality businesses where I spoke for two hours on the subject of inventory control or stocktaking as it is referred to in Europe.

The unfortunate truth about stocktaking is that for many bars/restaurants they are either reluctantly undertaking a physical inventory every so often or they are doing nothing at all and to be quite honest, neither is good enough.

In this day and age, when the economic difficulties of doing business are as plain as day, it should be obvious to business owners that in order to Manage, they have to Measure. There are no two ways about it.

Do you think a bank could stay in business long if they didn’t count their cash at the end of the day? (sadly many banks have gone to the wall for other business sins….)

Do you think that a dry cleaning business would last if they kept losing customer’s clothes? I don’t think so.

I argue that by this measure, there is no reason why a bar or  a restaurant shouldn’t be keeping daily tabs on their stock and cash.

One bar owner recently shared with me his surprise that his bottom line normally improved for the few weeks after he was presented with inventory results. Unfortunately he was only presented with results twice a year.  Something wrong with this picture?

If you make cost control and physical inventories into scheduled tasks that happen a few times a year, don’t expect miracles. But by adopting a black and white mentality whereby there are consistent standards and measures in place, you may be just as surprised as our bar owner, except you’ll be surprised at what you’ll find all year long!

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I’m travelling between Columbus Ohio and San Antonio Texas today on my way to my quarterly mastermind meeting (more about that later). Walking through the maze of gates and terminals in Chicago airport, I was reminded how the larger chain restaurants and cafes can teach smaller owner run establishments a lot about portion control and cost control.

As a restaurant chain grows and more outlets are added, the risk of group failure is multiplied by every additional outlet that opens. Restaurant chains therefore have to have a solid system of cost and portion control in place before they scale up so that they don’t take their weaknesses with them to each additional opening.

As I was walking past Auntie Annes, a bagel chain, I noticed that one of the workers behind the counter was busy rolling the dough for the bagels. Once she had the dough rolled, she laid the length of roll on the counter over a pre-printed image of a pretzel, allowing her to make sure the size of her dough matched the size painted on the preparation area. This way, every bagel prepared by every worker remains the same size and head office is able to calculate their costs for this item very accurately. If every worker had his own ideas for the size of a bagel, cost control would go out the window and consistency would be eliminated.

If you’re not applying the same mentality to your serving sizes and portions, then now would be a good time to do so. Here some simple ways to start controlling your portion sizes today: [...]

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I once read the results of a survey that said 20% of bar owners said they had been the victim of theft in some form or another. It went on to say that the other 80% were either lying or not aware of just how widespread theft and fraud in this industry is.

In an average week, I work with 5 or 6 Hospitality Business owners in identifying stock and cash losses and implementing simple effective procedures to Identify when theft is occurring, Eliminate the losses once identified, and Implement a procedure to prevent it from happening again. It never fails to amaze me as to the level of complacency that exists and the potential that exists for significant losses.

Follow these steps and you’ll reduce the risks in your business:

1. Standardise your Systems

Sounds complicated but this simply means that every critical action in your business needs a standard system and method. Take your Cash Reconciliation of your Tills at the end of the night. If you don’t follow a certain system, you won’t get your reports, your tills won’t be zeroed for the next shift and you won’t know if cash takings are down. The same applies to every other action in the running of your business. Document your House Standards and train each staff member so that everyone completes a task the same way. Once staff members have been trained, a standard is in place and it will become easier to monitor staff performance. [...]

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